Cyberlockers, social media sites and copyright liability

2011 was the year US copyright law was put to the test confronting whether cyberlockers and social media sites are liable for infringements contributed to by these sites. Some sites, like myVidster (see here also) Megaupload, Hotfile, and MP3tunes suffered set backs or losses in the US courts. Others, like Visible Technologiesthe operator of the myxer.com social radio website and most recentlyVeoh Networks were more successful, at least so far.

Despite all of this litigation, key issues are still being litigated and perhaps will only be settled in the US Supreme Court. The issues include: can a cyberlocker or social media site be liable for direct infringement for the files uploaded to it; can a site which automates processes that it knows will result in copying be responsible for this copying or will it be exonerated as lacking in “volition”; when will the site operator be liable for contributory infringement or vicarious liability; and when does a site operator have actual or constructive knowledge of infringement or of “red flags” so as to lose DMCA safe harbor protection if the operator doesn’t take appropriate steps to disable access to the content.

2012 started off with yet another US case to address these issues. The case is Wolk v Kodak Imaging Network, Inc.2012 WL 11270 (S.D.N.Y. Jan 3, 2012). In this case the Plaintiff, Wolk, an independent artist of fantasy images and sports art, sued Photobucket, a photo-sharing Internet service provider that operates a website located at http://www.photobucket.com. Photobucket is what is known as a “user-generated content” website, which provides an online platform for users to post material that the users themselves upload. Photobucket enables users who establish a Photobucket account to upload digital photographs and videos so that they may be stored and viewed on the website. There are approximately 9 billion images and videos posted to Photobucket.

The facts in the case repeat a common pattern. The Plaintiff sent Photobucket a series of DMCA takedown notices. Where the notices listed specific URLs, access to those images were removed. However, Photobucket left accessible numerous identical copies available through other URLs. According to Wolk, sample searches she conducted yielded approximately 3,000 infringements of her images. Wolk stated this represented only a small portion of the full amount of infringements occurring on Photobucket of her images, and that many of the infringements consisted of multiple duplicates of images, sometimes five or six copies of the same image by a single user. Photobucket did not dispute this.

The parties brought various summary judgement motions for rulings before trial. The Court made the following findings:

Photbucket was not liable for the direct infringements resulting from the uploading of infringing images to its site because all of the copying occurred “automatically”. Photbucket, the court ruled, lacked the necessary volition to be liable for this copying.

Wolk had presented two theories to hold the other defendants, the Kodak defendants, liable for infringement: first, the Kodak defendants infringed because they reproduced Wolk’s images onto various products; and second, they infringed because an electronic preview page was generated on the Kodak Gallery website when a user made an order for a product bearing an image imported from the Photobucket website. Because all reproductions, displays or transmissions occurred through an automated process with no human intervention, the court ruled there was no volitional conduct for which they were responsible.

Photobucket was a service provider for the purposes of the DMCA and was entitled to the hosting safe harbor. Despite the infringements which occurred at the site and the site operator’s awareness that infringing images of Wolk were on the site, these facts and circumstances did not meet the actual or constructive knowledge requirements of the DMCA.

The Court’s holding on the applicability of the DMCA hosting safe harbor mirrored the recent decision of the Ninth Circuit Court of Appeals in the UMG Recordings v Shelter Capital Partners LLC (Veoh Networks)101 U.S.P.Q.2d 1001 (9th. Cir. 2011) case, although only the decision of the lower court in the case was referred to.

The Second Circuit Court of Appeals is considering somewhat similar issues in the Viacom litigation against YouTube. A ruling on that appeal is pending. The issues in that case are extremely important ones for both copyright holders and online service providers and will likely determine the extent to which cyberlockers and social media sites in the US will have responsibility to cooperate in stemming infringements they enable. These issues are of such importance that they will likely not be settled until the US Supreme Court rules on them.

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